BANARASI DEVI versus INCOME-TAX OFFICER, CALCUTTA

Citation: [1964] 7 S.C.R. 539 · Decided: 31-03-1964 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

7 S.C.R. 
SUPREME COURT REPORTS 
539 
BANARASI DEVI 
v. 
INCOME-TAX OFFICER, CALCUTTA 
[K. SUBBA RAO, J. C. SHAH AND S. M. Snau, JJ.J 
Income-tax Act, (11 of 1922), as amended by Income-tax 
(Amendment) Act (1 of 1959) s. 4-Fiscal enactments-Inter-
pretation of-"lssued" in s. 4 of the Amending Act-Meaning 
of. 
For the assessment year 1947-48 the appellant in the fust 
case field a return of her income and the assessment was com-
pleted sometime in 1948 as a result whereof it was found that 
no tax was payable by her. On April 2,1956, the appellant was 
,;erved with a notice dated March 19, 1956, under s. 34(1) of the 
Income-tax Act, 1922, on the ground of escaped assessment. 
The date of the notice fell within' 8 years from the end of the 
relevant assessment year i.e. March 31, 1948, but it was served 
beyond 8 years from the date and therefore was clearly out 
of time under the provisions of the said section. In the second 
case, the appellant was assessed for the assessment year 1947-48 
and the tax thereon was deposited on his behalf. On April 2, 
1956, the appellant was also served with a similar notice as 
aforesaid. The appellants filed two petitions under Art. 22~ 
for .quashing the said notices and the learned Judge of th• 
High Court issued rules nisi to the Income-tax Officer, the 
Commissioner of Income-tax and the Union of India. On Sep-
tember 11, 1958, the rules were made absolute. The respon-
dents then preferred appeals to a Division Bench of that ·Court 
Pending the appeals, on March 12. 1959, s. 34 of the Act wa,; 
amended by s. 2 of the Amending Act, 1959. After the said 
amendment the appeals were heard and relying uPOn the said 
amendment the learned judges held that the. said notices, 
though served on the appellants after the prescribed time, 
w<ere served under s. 4 of the . Amending Act. On appeal by 
Special Leave it was urged on behalf of the appellants that 
s. 4 of the Amending Act only saved a notice issued after the 
prescribed time, but did not apply to a situation where notice 
was issued within but served out of time. The respondents 
contended that the expression "issued" means "served" and 
that, in any view, it was comprehensive enough to take in the 
entire process of giving and serving of notice. 
Held: To the present case the general rule of construction 
of fiscal Acts would apply, and not the exception engrafted on 
the rule; for, s. 4 of the Amending Act, cannot he described 
as a provision laying down the machinery for the calculation 
of tax. In substance it enables the Income-tax Officer to re-
assess a person's income which has escaped assessment, though 
the time within which he could have so assessed had expired 
under the Act before the amendmei!t of 1959. · It resuscitates 
barred claims. Therefore, the same stringent . rules of con-
struction appropriate to a chargilig section shill! also apply to 
such a provision. 
Case law discussed. 
On a true construction of s. 4 of the Amending Act, it must 
be held that the clear intention of the legislature was to save 
the validity of the notice as well as the assessment from an 
lgf4 
Jlarcli.31 
540 
SUPRE:ME COURT REPORTS 
[I964J 
1964 
attack on the ground that the notice was given beyond the 
. 
. prescribed period. That intention would be effectuated if the 
Banara.ti. DevJ wider meaning is given to the expression "issued". 
The die-· 
lncotRe-,:; 
Offictr, tionary meaning of the expression "issued" takes in the entire 
· 
Caktitta 
'process of sending the notice as well as the service thereof. 
The said word used in s. 34(1) of the Act itself was interpreted 
by courts to mean 'served". The limited meaning, namely, 
"sent" will exclude from the operation of the provision a class 
cl cases and introduce anomalies. In the circumstances, by 
interpretation, the wider meaning of the word "issued" 
must be accepted. In this view, though the notices were served 
beyond the prescribed time, they were saved under s. 4 of the 
Amending Act. 
Case law referred to 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 142 
and 143 of 1963. Appeals by special leave from the judgment 
and order dated July 13, 1961, of the Calcutta High Court 
in Appeals from Original Orders No. 41 and 69 of 1959. 
S. Chaudhury and K. R. Chaudhuri, for the appellants 
(in C.A. No. 142/63). 
M. Rajagopalan, K. Rajendra Chowdhary and K. R. 
Chaudhuri, for the appellants (in C. A. No. 143/1963) .. 
K. N. Rajagopal Sastri and R. N. Sachthey, for the re

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